The Qui Tam Blog

Last Wednesday, the Justice Department held a conference to announce Pfizer’s off-label criminal and civil settlement for its fraudulent marketing practices.

Pfizer’s subsidiaries will plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding with the intent to defraud or mislead. It will pay a criminal fine of $1.195 billion and forfeit $105 million, bringing the total criminal settlement to $1.3 billion.

The civil settlement of $1 billion will resolve claims under the False Claims Act that Pfizer illegally promoted four of drugs (most notably the anti-inflammatory drug Bextra), caused false claims to be submitted to government healthcare programs for indications other than those approved by the FDA, and provided kickbacks to doctors to induce them to prescribe these drugs.

Pfizer has also entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services that will subject the company’s marketing practices to additional review procedures and safeguards to help avoid and promptly detect similarly offending conduct. For example, Pfizer’s executives will need to complete annual compliance certifications and the company will be required to make detailed disclosures on its website. 

The settlement is notable enough for its sheer magnitude: it is the largest in the Department of Justice’s history; it also represents the largest criminal fine imposed ever in the United States for any matter.

But the story behind the story is also interesting. The settlement itself was already announced–and largely completed–by the Bush administration. But whereas the Bush administration was less likely to tout its strikes against big pharmaceutical companies, the Obama administration is happy to take the credit. This certainly signals a bleak future for the drug companies. The administration appears poised to go after these cases with more gusto, especially as it faces criticism for the high cost of Obama’s healthcare proposals.

In January, Eli Lilly and Company settled similar claims over its marketing of Zyprexa for $800 million. The success of that case can be traced directly to courageous stands taken by employee whistleblowers. 

The six whistleblowers in the Pfizer case will share some $102 million of the federal portion of the civil recovery. As employee whistleblowers continue to work with the current administration, we can expect to see more of these announcements in the coming months.

Do you know about fraud committed against the Federal or State government? It may be time to call a whistleblower attorney to represent you in court. This article will help you understand the basis for and method of filing a Qui Tam lawsuit or what is better known as a ”Whistleblower” lawsuit against a corporation or medical practice that is defrauding the government.

The False Claims Act (FCA) was originally passed during the Civil War, but was amended in 1986 and gives citizens a potential monetary reward for reporting fraud. Typically, the individual who has reported the fraud is an employee or former employee of the corporation in question. This individual, known as the “relator,” is the whistleblower.

Once the “whistle is blown” as it were, the Department of Justice will review the case and decide whether or not it wants to intervene. Since the 1986 amendments, whistleblower attorneys have been able to recover over $12 Billion.

You will want to contact a whistleblower attorney for healthcare fraud (Medicare, Medicaid, drug corporation) or other government contracting frauds. A good attorney can represent your case and help you learn the details of being a relator in the case.

Turning a corporation in for fraud does not need to be a daunting process with the help of an experienced whistleblower attorney. It can be financially beneficial to you as the relator, and is also of beneficial to your country. If you suspect fraud and are interested in filing a claim, don’t hesitate to contact a whistleblower attorney.

Are you a victim of Medicare fraud?  If you’re deciding whether to report potential fraud with a Medicare fraud attorney, use the list of situations below to help guide your decision. Each of the three scenarios listed below is an example of a fraudulent Medicare charge.

It is important to always review your medical bill. This is how you will become aware of potentially fraudulent Medicare charges. If anything on your bill seems suspicious, don’t hesitate to look into it further.

1. Your Medical Bill Includes Services Which Were Not Performed
As you review your bill, you may become aware of items which were billed but not performed. If you don’t remember a listed procedure, test or service being performed, get more information immediately. Fraudulent charges occur when a medical firm hopes to slip extra charges into your bill without anyone noticing. It is important to check your bill for extra services so this fraud can be caught.

2. Your Medical Bill Includes Services Which Were Deficient Or Worthless
If you were charged for services that did not render the appropriate treatment, you may want to consider contacting a Medicare fraud attorney. If tests, procedures or medical services were not performed to medical industry standards, or if the service in question was deficient in some way, the medical firm billing for the service should not include this service on the bill. Watch your bill to make sure deficient or worthless items to not appear.

3. Your Medical Bill Includes Fees For Services Which Were Not Necessary
Did you receive treatment or tests that were not necessary? Some medical firms perform unnecessary services so they can bill them. This is a dehumanizing way for a medical office to make an extra buck, and is a good reason to discuss your potential case with a Medicare fraud attorney.

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz

Senator Claire McCaskill’s whistleblower protection amendment to the American Recovery and Reinvestment Act of 2009 includes provisions to ensure that employees are able to disclose waste, fraud, or mismanagement related to stimulus funds.  The protections afforded by the McCaskill Amendment are in addition to the whistleblower protections provided by the False Claims Act.  The McCaskill Amendment applies to state and local governments, private contractors, and other non-Federal employers receiving a contract, grant, or other funds made available by the economic stimulus bill.  The McCaskill Amendment protects employees that disclose information, either to a supervisory authority over the employer or to another employee that has the authority to investigate misconduct, that the employee reasonably believes is evidence of:

• gross mismanagement of an agency contract or grant related to stimulus funds;
• gross waste of stimulus funds;
• a substantial and specific danger to public health or safety related to the implementation or use of stimulus funds;
• an abuse of authority related to the implementation or use of stimulus funds; or
• a violation of law, rule, or regulation related to an agency contract or grant relating to stimulus funds. 

Furthermore, disclosures made by employees in the ordinary scope of employment are also specifically protected.  Any employee engaged in protected conduct is protected against retaliation by the employer, including discharge, demotion, or other discrimination.  If an employee suspects that he or she has been retaliated against for engaging in protected conduct, the employee must file a complaint with the appropriate inspector general.  As currently written, the McCaskill Amendment provides no statute of limitations to file this complaint.  In order for an employee to establish a retaliation claim under the McCaskill Amendment, the employee is only required to prove that the protected conduct was a “contributing factor.”  While an employee is required to exhaust all administrative remedies first, the McCaskill Amendment expressly provides that pre-dispute arbitration agreements are not binding for claims brought under the Amendment. If the employee prevails, the employee is entitled to reinstatement, back pay, compensatory damages, attorneys’ fees, and litigation costs. 

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz

FCA liability will attach when a false statement is relevant to the government’s decision to confer a benefit, even if the false statement is made by an individual that is not a party to the claim submitted to the government for payment.  This is because the FCA contemplates liability for causing the government to approve a false claim, in addition to causing the government to pay a false claim.  Therefore, a vendor who falsely certifies the creditworthiness of a potential homebuyer for purposes of obtaining Department of Housing and Urban Development (HUD) insurance for mortgage-secured loans will be liable under the FCA if and when the homebuyer submits a claim to HUD after defaulting on the loan.  This is true despite the fact that the vendor is not a party to the claims submitted to HUD because the vendor’s false statements with regard to the creditworthiness of the purchasers induced the government to insure homes, approve claims, and confer a benefit of monetary payments to the homebuyers.  United States v. Eghbal, 548 F.3d 1281 (9th Cir. 2008).

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz 

In Rodriguez v. Our Lady of Lourdes Medical Center, the Third Circuit noted that it has declined to adopt either an express or implied false certification theory.  The court further held that even if it did adopt such a theory, FCA liability will not attach unless the relator shows that a defendant’s certification of compliance with applicable regulations is a condition of payment of federal funds.  Under the express false certification theory, a defendant is liable for falsely certifying its compliance with statutory or regulatory requirements in connection with the receipt of federal funds.  Under an implied certification theory, FCA liability can attach even when the defendant has not expressly certified that it complied with the regulations that it violated.  While declining to adopt either false certification theory, the Third Circuit noted that, under either false certification theory, it is still the relator’s burden to demonstrate that the defendant failed to comply with applicable regulations, and that the payment of federal funds was conditioned on compliance with those regulations.  In affirming the dismissal of the case, the court held that the relator did not satisfy this burden because the relator did not even suggest a connection between certification and condition of payment.

 By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz         

A district court in the Southern District of Texas recently held that nothing in the text of the FCA or its legislative history prevents employment-related retaliation claims from being arbitrated under a valid and enforceable arbitration agreement.  Under the Federal Arbitration Act, a valid agreement to arbitrate certain disputes is valid and enforceable unless Congress has precluded arbitration of the statutory right at issue.  The relator argued that the FCA precludes arbitration of retaliation claims because arbitration of such claims would allow defendants to immunize themselves against relator-initiated claims of FCA violations, undermining the purpose of the FCA to protect whistleblowers.  The relator further argued that such arbitration proceedings could constitute public disclosures, thereby unfairly triggering the public disclosure bar.  The court reasoned, however, that relators can avoid this issue by filing their retaliation claims with or after the qui tam claims.  The case is United States ex rel. Cassaday v. KBR, Inc.

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz 

In order to be successful, a relator must establish that a fraudulent statement or record was material to the government’s decision to pay a false claim.  For claims reimbursed under a diagnosis related group (“DRG”) code system, only identifying line items on a patient’s bill may fall short of this materiality requirement.  Reimbursement under the DRG system provides a fixed payment based on the patient’s DRG, which is calculated based on the patient’s diagnosis and age.  In most circumstances, the DRG rate satisfies full payment for all services provided, including prescription drugs.  Thus, under the DRG system, individual prescriptions are immaterial to the amount the government pays for the treatment of a given patient because payment is based solely on the DRG rather than any individual charges on the patient’s bill.  As such, those line item charges cannot serve as the basis for FCA liability under these circumstances.  The case is United States ex rel. Kennedy v. Aventis Pharmaceuticals, Inc., a court in the Northern District of Illinois.

 By: Joel Androphy, Rachel Grier, and Scott Braden

Whistleblowers should be mindful that disclosures in foreign periodicals can be considered public if the periodicals are regularly read by an international community. In a recent opinion, a U.S. District Court decided that an article in a foreign scientific journal was a public disclosure, given the international nature of the scientific community. The court reasoned that the foreign publication of a scientific article does not make it “any less accessible to the American public than if it were published in a scientific journal located in the United States.  The court also clarified that not all foreign publications are public disclosures, such as an ordinary article in a Greek newspaper. In these instances, there is no public disclosure when an article is published in a different language in a foreign publication not regularly read by an international community. The case is USA ex rel. Radcliffe v. Purdue Pharma L.P., a court in the Western District of Virginia.

Federal False Claims Act and Qui Tam Actions
Law Journal Press Webinar
By: Joel M. Androphy, Sarah Frazier and Rachel Grier

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